“Business 101: Keep track of the money…
In the ‘time for money’ business, which is what all professional services
fundamentally are, keeping track of the time equates directly to keeping track
of the money. It just makes sense…”
Consultant, Top 5 Consulting Firm, UK practice
Introducing the problem
If you’re in professional services, you’re probably familiar with one specific, tedious task: filling
out the dreaded timesheet. Besides being very annoying, current ways of tracking time are
costing professional services companies a substantial amount of money. Despite time tracking
being such a critical part of all professional services firms’ operations, the way firms approach
this task has barely changed over the years. This has left us with obsolete software and processes
for timekeeping that do not support the needs of the business.
Timetracking is usually postponed until the very last moment and people have to rely on their
memory and things like their notes and e-mails to figure out what they’ve worked on in the last
days, weeks, or even months. Within larger firms, there usually is some form of Enterprise
Resource Planning (ERP) system in place which is used for the digital support of all major
processes of the organization, including time tracking. Although these solutions offer amazing
analysis and forecasting capabilities for upper management, timesheets in ERP systems are
usually chaotic and anything but user-friendly resulting in employees postponing the annoying
task as much as possible. This leads to inaccurate time logs that take way too long to create and
thus offer an unrepresentative view of actual job timings.
We at TIQ are trying to make a change. In our opinion, the main reason for the lack of change in
the process of tracking time is twofold. First, there is a general acceptance or belief that tracking
time will always be problematic, leading users to accept that “making the best of it” has to be the
only option. Secondly, we believe businesses don’t realize the impact inefficient time tracking has
on their bottom line. We have written this whitepaper to deal with these two barriers to change.
A significant driver for the relevance of time tracking for any particular firm is its operating
model. Below we’ve summarized several factors of a firm’s operating model and how they
influence the relevance of time tracking on a particular firm. For example, a high number of
clients per professional means that the impact of time tracking on this specific firm is high as
professionals have more variation in the timing elements that must be recorded:
Factor
Ranking
Explanation
No. clients/professional
High
A large number of clients per professional represents
‘breaks’ in the ‘flow’ of capturing time. It is these breaks that
cause inaccuracy and errors
No. projects/client
High
As above
No. clients/year
High
As above
Service/Fee Value
High
The higher the fee value the higher the potential lost
revenue
Billing Frequency
High
If the billing frequency is high there is less resilience in the
system to late time capturing
Performance
Management Procedure
& Frequency
Low
If the performance management frequency is low, i.e. per
annum, potential inaccuracies could not become apparent
for up to 12 months
By curating previous research and conducting our own, we were able to understand the total
costs of the current, outdated methods of tracking time and their impact on businesses. During
December 2015 and January 2016, we have surveyed 61 professionals in different verticals of
the professional services industry. Furthermore, we have conducted interviews with service
professionals to understand what an ideal time tracking solution would look like to them, the
users.
This whitepaper is brought to you by TIQ. We’ve collaborated with Jay Wilson, an MBA
candidate at London Business School and two Masters in Management students from London
Business School. The interviews were conducted from October to December 2015. For our
calculations, we have used the following assumptions:

Lost potential revenue consists of 100% of the untracked client work and time spent on
tracking time.

A workweek consists of 40 hours, a year consists of 48 working weeks

Responses within a range were normally distributed which allows us to determine an
average value of the range chosen (e.g. “between 50 and 70” has been valued 60). In
order to support conservative calculations, the answer “less than 70%” concerning the
percentage of client work tracked has been valued 70%.

Exchange rates for calculations are based on the exchange rates on 8 February 2016
The structure of this paper is based on verticals within the professional services industry. We
explain how each industry vertical scores on the rankings above, introduce the findings of our
interviews and survey and interpret the data to understand how time tracking is impacting these
individual verticals.
General findings
In this chapter, we will answer some general questions concerning timetracking within
professional services organizations. These answers give us an overview of the methods people
use to track their time and will identify several issues with these current practices.
How often do people really track
their time?
With the results of our survey, we are able to
better understand the way professionals
track their time, starting with the frequency
of time tracking. We asked our respondents
how often they registered their activities:
Surprisingly, only 20% of professionals
indicated that they record their activities
multiple times a day and only 18% does so
once a day. Around 40% of professionals
indicated that they track their time once or
twice week, while 22% indicated only doing
so once or twice a month.
How accurate are people really?
Most people know that current time tracking
solutions lead to inaccurate logs of time with
a lot of unrecorded client work. We wanted
to quantify this “leakage”. We asked our
respondents to estimate what percentage of
the time they spend on client work they
actually record. The results were staggering:
22% of professionals record less than 70
percent of the time they spend on client
work. That is to say, more than 30 percent of
all their billable time goes unrecorded.
Around 38% of professionals indicated
recording between 70 and 90 percent of
their billable time and 40% of professionals
indicated recording between 90 and 100
percent of the time they spend on client
work.
Do people track time spent on client
e-mail?
Today more than ever, we spend a significant
amount of time on e-mail. According to a
study by McKinsey, we spend up to 28% of
our workweek reading and answering e-mail.
We wanted to know to what extent service
professionals track this time. A whopping
58% of respondents indicated recording
less than twenty percent of this time. This
adds up to a lot of billable time going
unrecorded and inaccurate time logs
reverberating throughout the wider
organization in general.
Do people track time spent on client
phone calls?
From our interviews and previous talks with
professionals, we noticed that people are bad
at keeping track of the time they spend on the
phone with clients. Our survey respondents
confirmed this. Around 50% of respondents
indicated recording less than twenty
percent of the time they spend on client
phone calls.
Do people track time spent in client
meetings?
According to a study by Verizon, we spend
around 15.5 hours a week in meetings, part
of which is in client meetings. We wanted to
know what percentage of this billable time is
actually recorded. Although professionals
are much better at tracking meetings than emails and phone calls, 38% of respondents
indicated tracking less than twenty percent
of the time they spend in client meetings.
(Management) Consultancy
Impact of time tracking
Based on our interviews and survey results, we
were able to assess the average operating
model of a consulting firm. We found that
overall, consulting firms have very few clients
per professional and projects per client. This
decreases the impact of detailed time tracking
on the firm, since there are less “breaks” in the
flow of client work. Consultants’ billable rates
have been scored medium, meaning they’re
close to the overall average billable rate from
our survey. We also found that billing and
performance management frequencies are
average within consulting firms.
Analyzing these factor scores in the table to the
right, one would predict that the total impact of
time tracking within consulting firms is not very
large. However, the data from our survey
suggest otherwise and also give an explanation
of this unexpected result.
Factor
Score
No. clients/professional
Low
No. projects/client
Low
No. clients/year
Medium
Service/Fee Value
Medium
Billing Frequency
Medium
Performance Management
Procedure & Frequency
Medium
Findings from survey
Management consultants spend a relatively large portion of their time working directly with
clients. On average, client work accounts for 75% of their workweek. If we assume a 40 hour
workweek, this comes down to 30 hours a week spent on clients. We also found that in general,
consultants work on very few different clients or projects during an average week: the average
was only 2.4 different clients per week. This makes filling out timesheets fairly easy.
The small number of clients is the main
reason consultants only spend an average
of 15 minutes a week on tracking their time.
While consultants appear to be very fast
with filling out timesheets, their accuracy is
far from optimal. According to the survey,
consultants only record around 85% of the
time they spend on client work, which
means that 15% of all billable time is leaked
and therefore not billed. In the graph on the
right we have summarized how an average
consultant spends his/her time on a weekly
basis.
Annually, more than
€46.000
is lost in revenue per
individual consultant
The direct total costs of tracking time consist
of the amount of untracked client work and
the time spent tracking time. If we assume a
40 hour workweek, a consultant leaks an
average of around 4.32 hours a week. If we
add the weekly 13 minutes spent on
timetracking, this comes down to an average
4.54 hours a week. With an average hourly
billable rate of €212.10, timetracking is
costing an average of €959.89 per consultant
per week in lost revenue. This adds up to an
average annual loss of around €46.074 per
consultant.
Accountancy
Impact of time tracking
Based on our interviews and survey results, we
were able to assess the average operating
model of an accountancy firm. We found that
the average accountant works on numerous
projects at any one time. This increases the
impact time tracking processes have on the firm,
since there are more “breaks” in the flow of
client work. According to the survey, accounting
firms maintain billable rates that are slightly
above average. Interviews showed that
accountancy firms have billing frequencies that
can be scored Medium and an overall low
performance management frequency.
Based on analysis of their operating model, one
can conclude accountancy firms are affected
significantly by time tracking practices. Data
from the survey confirms this conclusion, as we
show accountancy firms lose meaningful
revenue to ineffective time tracking practices.
Factor
Score
No. clients/professional
Low
No. projects/client
High
No. clients/year
Medium
Service/Fee Value
Medium
Billing Frequency
Medium
Performance
Management Procedure &
Frequency
Low
Findings from survey
The average accountant spends 62% of their time on client work. When we assume a 40 hour
workweek, this comes down to 24.8 hours a week spent on clients and 15.2 hours on non-client
work. Accountants work on numerous client projects each week; our survey showed an average
of 6.1 different clients/projects a week. This means that an accountant has to submit a number
of different “bookings” when tracking their time, since their time is allocated to a relatively large
amount of different clients or projects.
The relatively large number of different
clients and projects mean that an accountant
has to allocate quite some time to monitoring
their time each week: The average
accountant spends almost 45 minutes a
week on time tracking. Although they spend
quite some time on timekeeping,
accountants still only record an average
87% of client work. This means that 13% of
client work is basically done for free. The
chart on the right represents the way the
average accountant spends their time.
Annually, more than
€44.600
is lost in revenue per
individual accountant
The potential revenue accountants are losing
consists of the time spent on tracking time
and the untracked, or leaked, client work time
that is unrecorded. Where accountants
spend an average of 0.74 hours a week on
tracking time and leak an average of 2.6
hours a week, this adds up to 3.34 hours of
lost billable time a week. With an average
hourly billable rate of €298.16, time tracking
is costing accounting firms €44.601 per
individual accountant on a yearly basis. .
Besides these direct costs, more subjective
costs of tracking time are inaccurate client
billing, non-optimal workforce utilization and
employee frustration
Law
Impact of time tracking
Using the insights from the interviews we had
with several professionals in different law firms,
we were able to assess their operating model.
Lawyers deal with a large number of different
matters for a large number of different clients
each and every day, significantly increasing the
impact of time tracking processes on the firm.
Law firms charge high billable rates, which
further increases the impact of time tracking as
each lost minute of billable time is very costly.
Based on the interviews, we scored the average
billing frequency of law firms “Medium” and
their performance management frequency
“Low”. Judging from the average law firm’s
operating model, time tracking practices have a
significant impact on this industry vertical.
Results from our survey confirm these
expectations.
Factor
Score
No. clients/professional
High
No. matters/client
High
No. clients/year
High
Service/Fee Value
High
Billing Frequency
Medium
Performance
Management Procedure &
Frequency
Low
Findings from survey
Our survey showed that legal professionals spend an average of 64% of their time on client work.
If we assume a 40 hour workweek, this comes down to 25.6 hours a week spent on clients. Just
like in our interviews the average number of different clients a lawyer works on each week is
high: around 5 per week.
This results in lawyers having to allocate
significant effort and time to tracking time
each day. Our survey showed that a lawyer
spends an average of 86 minutes a week on
tracking time. This time spent on time
tracking results in a relatively accurate
account of time spent on client work: With an
average of 86.4%, lawyers record the largest
percentage of the time spent on clients. Still,
13.6% of all client work goes unrecorded. In
the chart to the right, we have summarized
the way an average lawyer spends his/her
time.
Annually, more than
€60.000
is lost in revenue per
individual lawyer
The potential revenue lawyers lose to
tracking time consist of the time they spend
filling out their timesheets and the amount of
untracked client work. Lawyers spend 1.43
hours a week on tracking their time and leak
an average of 3.46 hours per week. This adds
up to 4.89 hours a week lost to tracking time.
With an average hourly billable rate of
€323.89, the average lawyer is missing out
on €60.043 in potential revenue on a yearly
basis. Besides these direct costs, subjective
costs of tracking time are inaccurate client
billing, non-optimal workforce utilization and
employee frustration.
The solution
So what are the main issues that are causing these extremely large losses of potential revenue?
From our interviews we concluded that time tracking issues and needs are very similar across
industries but quite different among different stakeholders within a firm. Time tracking
eventually affects operational staff, managers, finance departments, partners and a firm’s clients,
and all have different needs as they relate to time tracking. In order to determine what would be
the ideal time tracking solution, we’ve mapped these stakeholders’ time tracking needs in the
table below.
Stakeholder
Impact
Needs
Operational staff
Data entry of time
assigned to client
Easy to use solution with cross-platform
and mobile functionality
Managers
Monitoring capacity
utilization and managing
workload of staff
Easy, real time dashboarding and results
Finance departments
Billing, assessing monthly
utilization, calculating
profitability, forecasting
On time and accurate data entry and
reporting, in depth dashboarding
Partners
Assessing firm
performance
On time and accurate data entry and
reporting, in depth dashboarding
Clients
Assessing invoices,
challenging firm on billable
time
Detailed and accurate reporting
To summarize, firms need a time tracking solution that is both lightweight and easy to use, but
one that also allows for extensive analysis and reporting. Technology has failed to provide us
with a solution that properly fulfills the needs of all stakeholders within a professional services
firm. There are plenty of very lightweight, easy to use time tracking solutions like Toggl or
Harvest. The problem with these tools is that they do not support analysis and reporting modules
that are extensive enough for larger professional services firms’ needs. Then there’s the
heavyweight ERP systems like SAP and Microsoft Dynamics. These systems support very indepth analysis, forecasting and reporting, but are everything but user-friendly when it comes to
data-entry. We believe active engagement by the user is critical for accurate, reflective data
capture. This leaves us with an unfilled gap: a solution that is easy to use but also allows indepth analysis.
We founded TIQ in order to fill this gap. We wanted to build a solution that focuses on userfriendliness, while still allowing extensive analysis and forecasting. Since most large professional
services firms already have some form of ERP system in place they use throughout the entire
organization, we wanted to find a way to improve these systems instead of competing with them.
TIQ combines the best of both worlds by providing an easy-to-use, automated time tracking
application that directly pushes the data to a firm’s own backoffice for analysis and forecasting.
TIQ effectively replaces the timesheet module within these ERP systems with a simple mobile
and desktop app that automatically captures and allocates an employee’s activities throughout
the work day. This results in a more accurate log of what time is spent to what clients, and it can
be created in just one minute each day.
Find out more about TIQ